Use this form to define cost categories that specify costs that are related to operations resources and routing operations. Each cost category has an assigned cost group for supporting cost segmentation in the calculated costs of manufactured items. Different cost categories are used for handling different costs and cost groups. For example, different hourly rates for different labor skills or machines, or for differences between setup and process steps. The cost categories and the costs that are associated with a routing operation will be used by BOM calculations. These will also be used by the route card or job card journals when reporting time against a production order.

Certain types of production labor hours may apply to project time estimates and reporting. This requires that a cost category is also used for project purposes. A cost category used in projects can have project-specific costs and sales prices. When you select the field use in projects, the form displays additional tabs and buttons about project-related information. A cost category that is only used for project purposes should be maintained in the Project categories form.

Note

Cost accounting also contains a Project categories form, but this form has no relationship to cost categories for routing operations.

A manufacturing company used three types of machines with different cost structures and two types of labor skill sets with different labor rates. The company defined one cost group labeled machines and assigned it to three cost categories that were defined for the three types of machines. Each of these three cost categories had a different hourly cost that represented the average costs for running the machine. The company defined another cost group labeled labor and assigned it to two cost categories that were defined for the two types of labor skills. Each of these two cost categories had a different hourly cost that represented the average hourly pay rate. The cost categories were assigned to the routing operations that were performed at the machine operations resources and the labor operations resources.